13-month salary legislation under discussion

A first consultation meeting took place yesterday on a proposed legislation for 13th month basic salary payment for the private sector, as well as minimum wage increase and other related issues that will have a direct impact on this sector.

Present at the meeting were Vice-President Danny Faure; the Minister for Finance, Trade and the Blue Economy Jean-Paul Adam; the Minister for Labour & Human Resource Development Idith Alexander; principal secretary for labour and human resource development Veronique Bresson; and a delegation from the Seychelles Chamber of Commerce & Industry (SCCI) headed by its chairman Marco Francis.

Held in the Vice-President’s office at State House, this on-going meeting between government and the private sector follows the announcements made by President James Michel in his State of the nation address to the National Assembly on the increase of the minimum wage from R4,050 to R5,050 which will take effect in April 2016 and the introduction of a legislation that would see the implementation of the compulsory 13th month basic salary for workers in the private sector.

Employees in the public sector who are not on contract were paid their 13th month basic salaries by January 14, 2016.

Speaking to the press after the meeting, Minister Alexander said there has been constant dialogue with SCCI on the issues concerning workers in the private sector since these announcements.

“We’ve listened to concerns brought by SCCI and we’ve discussed a legislation we are working on for the implementation of the 13th salary to be defined by law for the private sector which will be brought before the National Assembly in May 2016 for approval. We want everything to run smoothly and that everybody understands the procedures when we start the 13th month salary payment as from December 2016 this year with the cutting date for last payment on January 15, 2017 where everybody should have been paid their 13th salary,” said Minister Alexander.

She also said that they have discussed a pro rata whereby workers entering work later during the year will also be paid their salary based on their period of time in employment.

Another concern brought by the SCCI was the fact that a very small portion of the business community will not be able to implement the 13th month basic salary and for that has requested for those businesses to be exempted.

Minister Alexander said that with on-going discussions with the SCCI “those businesses will be identified and assessed and will then be exempted. We are not forcing the private sector to comply with the government’s decisions but it’s a mutual understanding through consultations between the government and the private sector. We are getting the full support of the majority of businesses apart from a few which we are listening to their concerns through their SCCI representative so that everything comes out well,” noted Minister Alexander.

According to Mr Francis, the majority of businesses in the private sector are giving a 13th month basic salary or bonuses to their employees and apart for some that are unable to do so, only a few were unwilling to give.

“We cannot have two systems whereby one group is having a 13th month salary and a few is not getting it. We cannot have an unfair system in Seychelles .That’s why we are working in partnership with the government to implement that into law and that when that law comes out both the government and the private sector are happy about it,” said Mr Francis.

In recognition that some companies may experience financial difficulties, Mr Francis noted that is why SCCI is having continued discussions with the Ministry of Labour & Human Resource Development and the Ministry of Finance, Trade & The Blue economy so that those facing financial difficulties would be exempted from the 13th month basic salary so as not to create a burden on them.

On the minimum wage increase, Mr Francis said that this increment will have an effect on businesses employing a lot of people, an issue that the SCCI is still in discussion with government.

“But we also have to realise that the previous minimum wage was not a salary that somebody could sustain a family with. We also live in a community, we live in a society and that we have to make sure that everybody in a society can live comfortably. We as the private sector have our responsibility to do that,” concluded Mr Francis.

Further follow-up meetings on those related matters between government and SCCI will take place in the coming weeks.